Interactive Brokers Help

[mcappo 1]

I just had my portfolio moved from Questrade to Interactive Brokers. The site is quite a bit more difficult to navigate.Firstly all the spread trades i had at questrade arrived as individual trades under my portfolio....wondering if there is an easy way to group them back under "bull put spreads" or do i need to close or adjust them individually?  Can someone please let me know how i can easily find itm% and otm% when trying to place vertical spreads? Can't seem to find it anywhere. Thanks peeps.

[Kim 7,423]

Trading and getting fills with Interactive Brokers

Executing Orders in Interactive Brokers

Yes, you can create spreads in IB. I highly recommend to learn the platform before doing live trading.

[craigsmith 357]

1 hour ago, mcappo said:

I just had my portfolio moved from Questrade to Interactive Brokers. The site is quite a bit more difficult to navigate.Firstly all the spread trades i had at questrade arrived as individual trades under my portfolio....wondering if there is an easy way to group them back under "bull put spreads" or do i need to close or adjust them individually?  Can someone please let me know how i can easily find itm% and otm% when trying to place vertical spreads? Can't seem to find it anywhere. Thanks peeps.

There is not a way to group them back together. They aren't sent over as complex positions, just individual positions, so they will have to be adjusted individually. Not sure what you're asking with the second question.

[mcappo 1]

3 minutes ago, craigsmith said:

There is not a way to group them back together. They aren't sent over as complex positions, just individual positions, so they will have to be adjusted individually. Not sure what you're asking with the second question.

IB doesn't seem to have a probability calculator like TOS or questrade.....but i guess using delta would work just as well....ie a .15 delta gives an 85% probablility of finishing otm? Thanks for the reply.

 

[craigsmith 357]

Yes, and IB might have what you're looking for, it's just not a tool I use.

 

IB is great, it just takes some time to get used to it. I WISH I could find a platform that had everything I needed in one place. I have trading accounts at IB and Tradier (using Tradehawk). I also have a live, unfunded account at TOS, so I'm running 3 broker platforms just to get all the info I want.

[anand331 137]

I was looking into the tax forms for my accounts at IB and noticed a large amount of losses deferred due to wash sale. The account primarily does SO trading. Has anyone else noticed the same thing? Is the general experience that IB handles wash sales correctly? Any ideas or thoughts from the community will be really appreciated. Have you used TradeLog and found significant differences in the wash sale treatment?

[greenspan76 299]

3 hours ago, anand331 said:

I was looking into the tax forms for my accounts at IB and noticed a large amount of losses deferred due to wash sale. The account primarily does SO trading. Has anyone else noticed the same thing? Is the general experience that IB handles wash sales correctly? Any ideas or thoughts from the community will be really appreciated. Have you used TradeLog and found significant differences in the wash sale treatment?

The last few years, I thought the same thing at first, but after going line by line through 2014, 2015 and 2016's Form 8949 worksheets, I found that they were in fact correctly adjusting the cost basis (on the remaining position that was subject to wash sale rules), so that's how it should be and I have not bothered to doublecheck this year. Now I have had multiple corrected 1099's issued after February 15th for the last couple years (as late as July, actually), which is a little annoying, but they've all been really small issues - like a net $3 difference or something similar. So far, the only problem I've found with their finalized tax forms is the cost basis of stocks that paid "dividends" that were actually return of capital. I only had 2-3 stocks that did that and I closed those positions prior to 2017, but the cost basis they were reporting on the 1099 and Form 8949 worksheet was not adjusted for prior return of capital payments, so they were showing a smaller gain than I technically had and I had to keep a spreadsheet and then attach a statement and my own self-generated Form 8949 worksheet to my tax return with the corrected info. (I guess most people would have just not bothered since it would benefit them to pay less taxes, so I'm probably the only one to ever complain about it)

Edited February 20, 2018 by greenspan76

[anand331 137]

5 minutes ago, greenspan76 said:

The last few years, I thought the same thing at first, but after going line by line through 2014, 2015 and 2016's Form 8949 worksheets, I found that they were in fact correctly adjusting the cost basis (on the remaining position that was subject to wash sale rules), so that's how it should be and I have not bothered to doublecheck this year. Now I have had multiple corrected 1099's issued after February 15th for the last couple years (as late as July, actually), which is a little annoying, but they've all been really small issues - like a net $3 difference or something similar. So far, the only problem I've found with their finalized tax forms is the cost basis of stocks that paid "dividends" that were actually return of capital. I only had 2-3 stocks that did that and I closed those positions prior to 2017, but the cost basis they were reporting on the 1099 and Form 8949 worksheet was not adjusted for prior return of capital payments, so they were showing a smaller gain than I technically had and I had to keep a spreadsheet and then attach a statement and my own self-generated Form 8949 worksheet showing to my tax return with the corrected info. (I guess most people would have just not bothered since it would benefit them to pay less taxes, so I'm probably the only one to ever complain about it)

Thanks @greenspan76. The issue I see is with hedged straddle trades. Since the short strangles get closed and reopened (likely) on a weekly basis, the loss is deferred because of wash sale. Now you have to have gain on the same side (put or call) on the same name in later months to recapture that loss. If you stop trading that name, those losses are gone forever (with respect to taxes). Let me know if you think my understanding is incorrect. I was just debating whether to bother getting tradelog or not.

Edited February 20, 2018 by anand331

[Djtux 542]

2 minutes ago, anand331 said:

If you stop trading that name, those losses are gone forever (with respect to taxes).

I'm definitely not an expert, but i believe that you take the loss on the last closing trade as long as you don't reopen that contract within 30 days. I believe that the loss could be gone forever if you mix taxable account and retirement accounts.

[anand331 137]

2 minutes ago, Djtux said:

I'm definitely not an expert, but i believe that you take the loss on the last closing trade as long as you don't reopen that contract within 30 days. I believe that the loss could be gone forever if you mix taxable account and retirement accounts.

Thanks @Djtux. I don't see that from IB forms. They seem to defer losses till next gains (I confess, I have not done a thorough review yet). I have not mixed IRA/non-IRA accounts.

[Djtux 542]

2 minutes ago, anand331 said:

Thanks @Djtux. I don't see that from IB forms. They seem to defer losses till next gains (I confess, I have not done a thorough review yet). I have not mixed IRA/non-IRA accounts.

I believe that correct if you open the same contract within 30 days, so you can't take the loss from the previous trade. But if you don't reopen within the 30 days, then from what i understand then you can take the loss. Again i'm not an expert at this. Such a headache.

[anand331 137]

Just now, Djtux said:

I believe that correct if you open the same contract within 30 days, so you can't take the loss from the previous trade. But if you don't reopen within the 30 days, then from what i understand then you can take the loss. Again i'm not an expert at this. Such a headache.

I agree 100% on the headache part

I hoping and praying IB does the right thing.

[greenspan76 299]

7 minutes ago, anand331 said:

Thanks @greenspan76. The issue I see is with hedged straddle trades. Since the short strangles get closed and reopened (likely) on a weekly basis, the loss is deferred because of wash sale. Now you have to have gain on the same side (put or call) on the same name in later months to recapture that loss. If you stop trading that name, those losses are gone forever (with respect to taxes). Let me know if you think my understanding is incorrect. I was just debating whether to bother getting tradelog or not.

There shouldn't be a circumstance where you have a loss that disappears and can't be taken later, but I guess you know that and the real question is whether IB does it correctly or if you should buy Tradelog to make sure it is right. I'm both a cheapskate and do-it-yourselfer, so I don't know anything about Tradelog, but I'm pretty sure that in my case all the losses were deferred correctly. I did go manually line by line on all wash sales and didn't find an error, but of course I could have made mistakes, so if you're concerned about it, I guess it wouldn't hurt to use Tradelog and compare to IBs reports

[anand331 137]

1 minute ago, greenspan76 said:

There shouldn't be a circumstance where you have a loss that disappears and can't be taken later, but I guess you know that and the real question is whether IB does it correctly or if you should buy Tradelog to make sure it is right. I'm both a cheapskate and do-it-yourselfer, so I don't know anything about Tradelog, but I'm pretty sure that in my case all the losses were deferred correctly. I did go manually line by line on all wash sales and didn't find an error, but of course I could have made mistakes, so if you're concerned about it, I guess it wouldn't hurt to use Tradelog and compare to IBs reports

Thanks again. I will try to go line by line and if I find anything fishy will post back on the forum.

[Djtux 542]

1 minute ago, anand331 said:

I agree 100% on the headache part

I hoping and praying IB does the right thing.

Personally i will try Tradelog. I can't go through thousands of trades manually or else i will throw my laptop by the window :).

Depends on your account size and the number of trades.

I was unfortunable that i traded on several brokers last year, so it makes it even harder.

2 minutes ago, greenspan76 said:

There shouldn't be a circumstance where you have a loss that disappears and can't be taken later

I'm not an expert but from http://www.tradelogsoftware.com/resources/wash-sales/ it seems possible to have a scenario where you can't deduct that loss.

Quote

 

Wash Sales in an IRA
Special IRS wash sale rules affect active traders and investors who maintain an individual retirement account (IRA) in addition to a trading account. These special rules can have severe consequences on active traders and investors.

When a wash sale is triggered by an IRA trade, the loss is permanently disallowed in your taxable account.

There are no requirements to file IRS reporting for gains and losses realized in an IRA, nor are wash sale adjustments made within the IRA account alone. However, if you maintain a taxable trading account and an IRA, or Roth IRA, then you are required to adjust for wash sales that occur as a result of trading in all accounts, including the IRA.

 

 

[anand331 137]

@Djtux. I just took tradelog 30 day trial and will compare and see if their findings match IB's. If they do, I will just trust IB. I agree that if you have multiple accounts trading same names, you will never get it right just relying on broker's tax form and will need tradelog.

[greenspan76 299]

47 minutes ago, Djtux said:

Personally i will try Tradelog. I can't go through thousands of trades manually or else i will throw my laptop by the window :).

Depends on your account size and the number of trades.

I was unfortunable that i traded on several brokers last year, so it makes it even harder.

I'm not an expert but from http://www.tradelogsoftware.com/resources/wash-sales/ it seems possible to have a scenario where you can't deduct that loss.

 

Yes, you're right. You can lose a loss permanently if you're dealing with crossover between IRA and taxable accounts.

Edited February 20, 2018 by greenspan76

[Javier 99]

Question on Interactive Brokers.

I often buy a spread, let´s say for instance an Iron Condor, and later on I would like to monitor/manage it in a different way, let´s say as a Bull Vertical Put Spread plus a Bear Vertical Call Spread.

is there any way to rearrange the above IC in the two mentioned Verticals, inheriting all legs features?. I mean, if I set up two Combos (one for the Puts and other for the Calls) dragging IC legs, I lose some features as the P&L, Average Prix, Cost Basis and Market Value of the combination.

Thanks in advance.

Edited March 2, 2018 by Javier
typo

[cuegis 683]

The problem, which ultimately shows up on the form 8949, is that, for example, you have one leg of a trade, that was opened, and listed in one column, then closed, and listed in the "sale" column, in less than 30 days. And it may show, based on those 2 straight numbers, a loss of $1000, for example.

Then there is another column, called "wash sale adjustment", and they remove $700 from that loss, leaving you with a net $300 loss.

I think , if you declare yourself a "full time" trader, which most of us have enough volume of trades, and frequency of trades, to do so, then the "wash sale" rule does not apply.

I know of someone whose accountant just took scissors, and cut off the last 2 columns of that form (8949), which had the "wash sale" adjustment, and took the totals, without the wash sale adjustment, at the end of the full report, which provided a MUCH bigger loss, that can be used, against the next gains.

You are a "full time trader", so this would not be wrong, since the wash sale rule does not apply.

[anand331 137]

@cuegis, I think the only way you can get around wash sales is if you elect Mark-to-Market accounting and there are strict IRS requirements for you to elect MTM accounting (for example, bulk of your earnings have to come from short term trades, not investments). Also, remember that MTM method will also recognize all your unrealized gains at the end of year and you will pay taxes on them. I am not an accountant but just wanted to alert that it is not as simple as just treating yourself as a full time trader and just putting aside the wash sales. One should consult a competent CPA before making this decision.

[cuegis 683]

You are correct in everything you said.

I can do this because I have been a full time trader since 1980, and I had seats on, and was a member of, several commodity and stock exchanges. I am still a member of Comex, so I have "cover" in calling myself "full time".

But, the vast majority of my income really did, (and still does) come from trading.

I just don't trade on the floor anymore as they have closed the floors of all of the US exchanges, and all trading is all done electronically now, and has been for a long time now.

But, I have not done "mark to market" yet.

I will have to make that choice in the next few weeks.

 

Also, all of the "wash sale" rules do not apply to any trading in futures, and futures options, as far as I know.

It is calculated differently, on a 60/40 (long term/Short term, capital gains method).

And, I do much more trades, percentage wise ( even though strategically, they are basically the same trades) in futures options.

 

Edited March 13, 2018 by cuegis

[greenspan76 299]

7 minutes ago, cuegis said:

You are correct in everything you said.

I can do this because I have been a full time trader since 1980, and I had seats on, and was a member of, several commodity and stock exchanges. I am still a member of Comex, so I have "cover" in calling myself "full time".

But, the vast majority of my income really did, (and still does) come from trading.

I just don't trade on the floor anymore as they have closed the floors of all of the US exchanges, and all trading is all done electronically now, and has been for a long time now.

But, I have not done "mark to market" yet.

I will have to make that choice in the next few weeks.

 

I'm sure you've done your homework on this, but just to clarify for anyone else reading, the MTM election must be made before the original due date of the prior year's tax return. In other words, you have from now until April 17th to make the election for tax year 2018. It is too late to make it for 2017

Edited March 13, 2018 by greenspan76
corrected error - too late for 2017 (not 2019 as originally posted)

[Stone 0]

I am living in Canada. I use IB traded a lot of Options last year. Are there any Tax Software in Canada can import the T5008 Trading Summary?